Hurricane Irma batters Puerto Rico on a path toward Florida that could turn the Category 5 hurricane into the most expensive storm in US history

Waves crash against the seawall as Hurricane Irma slammed across islands in the northern Caribbean on Wednesday, in Fajardo, Puerto Rico. Photo: Reuters

Boston: Irma barrelled toward Florida after battering Puerto Rico and devastating a chain of small Caribbean islands, as the Category 5 hurricane threatens to turn into the most expensive storm in US history.

Irma, one of three hurricanes spinning toward North America, is forecast to hit Florida by Sunday afternoon, a prospect that has roiled markets for everything from orange juice to insurance and natural gas. A mandatory evacuation order has been issued for some areas including downtown Miami and Miami Beach. Barclays Plc has estimated insured losses in a worst-case scenario from the storm at $130 billion.

“On the forecast track, the extremely dangerous core of Irma will move away from Puerto Rico” Thursday morning, the National Hurricane Center said in an advisory at 2am New York time. The agency warned of “life-threatening” storm surges “accompanied by large and destructive waves.”

Hurricane Jose was just behind Irma in the Atlantic and was also forecast to move just north of Puerto Rico while a third hurricane, Katia, churned in the Gulf of Mexico, threatening to come ashore in Mexico.

Hurricane watches may be issued for parts of the Florida Keys and the Florida peninsula as soon as Thursday as Irma approaches. Reinsurance companies could take a big hit as primary insurers have reduced exposure to Florida in recent years, analysts say. Volatility in stocks across the sector will probably continue until the storm’s path and damage become more certain.

The system may knock out power to almost 2 million people, curb natural gas demand in one of the largest US markets and threaten $1.2 billion worth of crops in Florida—the top US grower of fresh tomatoes, oranges, green beans, cucumbers, squash and sugarcane.

By late Wednesday, Irma was expected to have generated more energy than the entire 2013 Atlantic hurricane season, said Phil Klotzbach, a storm researcher at Colorado State University.

The storm damaged or destroyed as much as 95 percent of homes on the small island of Barbuda, crippled its airport runway and broke a cellular tower in two, complicating relief efforts, Prime Minister Gaston Browne said on national television. “It is absolutely heart-wrenching.”

At least six people on the French island of Saint-Martin have died as a result of Hurricane Irma, Agence France-Presse reported, citing Daniel Gibbs, the president of the regional council.

Mandatory evacuations

In the US, mandatory evacuations were issued for the Florida Keys and governor Rick Scott said he expected additional evacuation orders. President Donald Trump said in a Twitter post that he is “watching hurricane closely” and his team is already in the state. In addition to Miami-Dade’s mandatory evacuations, Broward and Collier counties issued voluntary evacuation orders for some areas.

Irma comes less than two weeks after Hurricane Harvey smashed ashore in Texas, knocking offline almost a quarter of US oil refining capacity and causing widespread power outages and flooding. Current models show Irma veering away from gas and oil platforms off the coast of Texas and Louisiana, sparing Houston more devastation.

The storm’s top winds weakened slightly to 290km an hour from 185 as of 3am New York time, making the system a Category 5, the highest measure on the five-step Saffir Simpson scale. It was about 245 miles east southeast of Grand Turk Island.

A direct strike on Miami at Category 4 strength could lead to insured losses of $125 billion to $130 billion, Jay Gelb, an analyst at Barclays, wrote in a note Tuesday. Uninsured losses would add to that. Losses from Katrina, both insured and uninsured, reached $160 billion in 2017 dollars after it slammed into New Orleans in 2005.

Once past Florida, the misery won’t be over for the US because the storm could run up the East Coast or drive deep into the continent, bringing flooding rains, said Knabb.

Only three Category 5 hurricanes have hit the contiguous 48 US states, according to Weather Underground: the Labor Day Hurricane of 1935 that devastated the Florida Keys, Hurricane Camille in 1969 and Hurricane Andrew that cut across Florida in 1992. Bloomberg